The Motley Fool

3 High-Yielding Energy Stocks I’d Buy With an Extra $5,000

One of the most well-known facts about investing is that dividend-paying stocks outperform their non-dividend-paying counterparts over the long term. It is for this reason that every long-term investor should own at least one dividend-paying stock, and depending on your age, investment goals, and risk tolerance, maybe even a diversified portfolio full of them.

With this in mind, let’s take a look at three stocks from the energy sector with yields up to 7.5% that you could add to your portfolio today.

1. Gibson Energy Inc.: 7.5% yield

Gibson Energy Inc. (TSX:GEI) is one of the largest independent midstream energy companies in Canada and one of the largest integrated service providers to the oil and gas industry in the United States. It pays a quarterly dividend of $0.32 per share, or $1.28 per share annually, giving its stock a 7.5% yield at today’s levels.

It is also very important to note that Gibson has increased its dividend for four consecutive years, and its increased amount of cash provided by operating activities, including 72.5% year-over-year growth to $294.06 million in the first half of fiscal 2015, could allow this streak to continue in 2016.

2. Pembina Pipeline Corp.: 5.7% yield

Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA) is one of the leading transportation and service providers to North America’s energy industry. It pays a monthly dividend of $0.1525 per share, or $1.83 per share annually, which gives its stock a 5.7% yield at current levels.

Investors should also note that Pembina has increased its dividend for four consecutive years, but its decreased amount of cash flow from operating activities, including a 14.5% year-over-year decline to $389 million in the first half of fiscal 2015, may cause this streak to end in 2016.

3. Emera Inc.: 4.4% yield

Emera Inc. (TSX:EMA) is one of the largest electric utilities companies in North America. It pays a quarterly dividend of $0.475 per share, or $1.90 per share annually, giving its stock a 4.4% yield at today’s levels.

It is also important to note that Emera has increased its dividend for nine consecutive years, and 2015 marks the first year of its five-year plan to grow its dividend by 8% or more annually, making it one of the top dividend-growth plays in the energy sector today.

Which of these energy stocks belong in your portfolio?

Gibson, Pembina Pipeline, and Emera represent three of the most attractive dividend-paying investment opportunities in the energy sector. All Foolish investors should take a closer look and strongly consider establishing positions in one of them today.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Joseph Solitro has no position in any stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.